Receipt Accrual Clearing Rules

Define accrual clearing rules to clear accrual balances automatically. Accrual balances are often of unknown origin and unpredictable. With accrual clearing rules you can specify when accrual balances should be cleared and written off.

The Clear Receipt Accrual Balances process scans for applicable rules on the transactions, and clears the balances when rule criteria are met. The following discusses the creation of accrual clearing rules using predefined attributes, and illustrates the results with an example.

Note: You must ensure that the corresponding general ledger period is open before running the Clear Receipt Accrual Balances process. If the period is closed, then the accrual clearing is moved to the next open period. If no other period is open, then the event will fail with error. Before closing the general ledger period, you must ensure that all the events in Receipt Accounting are fully accounted.

Predefined Attributes

The following table describes the attributes that are available in the Accrual Line tree in the Conditions browser:

Attribute Name	Description
Purchase Order Distribution Identifier	Purchase order structure is based on the hierarchy of purchase order header > purchase order line > purchase order schedule > purchase order distribution. The accounting for purchase order transaction is at the lowest level of purchase order distribution. The accrual and charge account codes are defined at this level. Invoices are matched and accrual is offset at the PO distribution level. This attribute represents the PO distribution ID on the PO document.
Percentage Over-Invoiced	At each purchase order distribution level, receipt accounting tracks the original ordered quantity, total received quantity, and total invoiced quantity. Percentage Over-Invoiced Quantity represents the condition: `IF (Net Rct qty - Invoice Qty) < 0 then ABS(NetRecptQty - InvoiceQty)/ NetRecptQty`
Percentage Uninvoiced	At each purchase order distribution level, receipt accounting tracks the original ordered quantity, total received quantity, and total invoiced quantity. Percentage Uninvoiced Quantity represents the condition: `IF (Net Rct qty - Invoice Qty) > 0 then ABS(NetRecptQty - InvoiceQty)/ NetRecptQty`
PO Status	Status of the purchase order document. If the PO status is Finally closed, then it's treated as Closed. You can define the accrual clearing rules based on the PO Status.
PO Match Option	Invoice match option defined on the purchase order schedule. It can be PO or Receipt.
Invoice Age	Days or time since the latest invoice was recorded for a purchase order distribution.
Receipt Age	Days or time since the latest receipt was recorded for a purchase order distribution.
Over-Invoiced Quantity	When the invoiced quantity is greater than the ordered quantity, it represents the difference between the two: `IF (Net Rct qty - Invoice Qty) < 0 then Over Invoiced Quantity = ABS(InvoiceQty - NetRecptQty)`
Under-Invoiced Quantity	When the invoiced quantity is less than the ordered quantity, it represents the difference between the two: `IF (Net Rct qty - Invoice Qty) > 0 then Under Invoiced Quantity = ABS(NetRecptQty - InvoiceQty)`
Percentage PO Accrual Amount	The balance in the accrual account for a PO distribution divided by the accrual value for the ordered quantity: `Sum(accruals in CMR and AP)/PO amount` `PO amount = Net Order Qty * PO Price`
Accrual Clear Amount	Value of balance in an accrual account for a PO distribution. Net of accrual amount credited in Receipt Accounting and that debited in Accounts Payable. To clear debit balance enter a positive number and for credit balance enter a negative number.
Total Invoice Accrual Amount	Absolute value of balance (net of invoices and debit memos) in an accrual account in Payables Subledger for a PO distribution.
Total Receipt Accrual Amount	Absolute value of balance (net of receipts, corrections and returns) in an accrual account in Receipt Accounting Subledger for a PO distribution.
PO Distribution Number	This attribute represents the PO distribution number on the PO document, such as 1, 2, and so on, and is different from the Purchase Order Distribution Identifier.
Supplier	Supplier name on the purchase order document.
Supplier Site	Supplier site code on the purchase order document.
Item	Item on the purchase order line.
Item Category	Item category on the purchase order line.
Accrual Amount Difference	Difference in accrual amount credited in Receipt Accounting and that debited in Accounts Payable.
Purchase Order Schedule Identifier	The identifier of the PO Schedule that uniquely identifies a PO Schedule number of PO.
Invoice Accrual Amount	Accrual amount debited on invoice in Accounts Payable for the item price.
Invoice Nonrecoverable Tax Amount	Accrual amount debited on invoice in Accounts Payable for the nonrecoverable tax.
PO Line Number	Line number on the Purchase Order Line.
Nonrecoverable Tax Amount Difference	Difference in the nonrecoverable tax amounts booked in Receipt Accounting and Accounts Payable for a PO Distribution.
Inventory Organization Code	Code that uniquely identifies a Inventory Organization.
PO Total Amount	Total amount on the Purchase Order.
PO Number	Unique identifier for the Purchase Order.
PO Quantity	Quantity ordered from the Purchase Order.
Purchase Basis	The basis on which the purchase is done.
Received Accrual Amount	Amount received for PO distribution.
Received Nonrecoverable Tax Amount	Nonrecoverable tax in the amount received for PO distribution.
PO Shipment Number	Schedule in purchase order indicating place of delivery.
Invoice Quantity	Quantity invoiced for PO Distribution.
Invoice Recoverable Tax Amount	Recoverable tax amount on the invoice for a PO distribution.
Received Quantity	Quantity received for a PO distribution.
Received Recoverable Tax Amount	Recoverable tax amount on the receipt for a PO distribution.
Procurement Business Unit	Business unit performing procurement business function.
Purchase Order - Deliver to Location	Delivery location on the purchase order schedule indicating place of delivery.
Profit Center Business Unit	Indicates the business unit which serves as the profit center.
PO Destination Type	Destination type on the PO which can be inventory, expense, manufacturing or drop ship.
Item Description	Description of the item on the purchase order line.

Example

This example illustrates the distributions for a purchase order with associated receipts and invoices.

The following table describes the purchase order details:

PO Header	Supplier	Supplier Site	Status
PO#1234	Advanced Network Devices	New York	Open/Close/Final Close

The following table describes the purchase order lines:

Item	Item Category	PO Price	Ordered Quantity
AS54888	Raw Materials	100 USD	100 EA

The following table describes the purchase order schedules:

Schedule	Order Quantity	Match Option	Status
1	100 EA	Order or Receipt	Open

The following table describes the receipts and invoices:

Receipts	Ordered Quantity	Received Quantity	Invoiced Quantity	Accrual Account	Status
Receipt 1	60	58	55	01-2210	Open
Receipt 2	40	40	45	01-2220	Open

The following table describes the purchase order distributions and accrual balances:

PO Distribution	CMR Accrual Amount (A)	AP Accrual Account (B)	Accrual Clear Amount (C) = (A-B)	Under-Invoiced Quantity	Over-Invoiced Quantity	Percentage Under-Invoiced	Percentage Over-Invoiced	*Percentage PO Accrual Amount (C)/Ordered QuantityPO Price**
Distribution 1	58*100 USD = 5800 USD	55*100 USD = 5500 USD	300 USD	60 - 55 = 5	Not Applicable	5/58*100 = 8.62%	Not Applicable	300 USD/60*100 = 5%
Distribution 2	40*100 USD = 4000 USD	45*100 USD = 4500 USD	(500) USD	Not Applicable	45-40 = 5	Not Applicable	5/40*100 = 12.50 %	500 USD/40*100 = 12.50 %

The following table describes the Rule 1:

Attribute	Operator	Value	Conditions
PO Status	=	OPEN	And
Percentage Under-Invoiced	Less Than	10%	Not Applicable

Results: The PO Status and the Percentage Under-Invoiced values meet the criteria of Rule 1; therefore the accrual balance of 300 USD is automatically cleared.

The following table describes the Accrual Amounts Cleared Based on Rule 1:

PO Distribution	CMR Accrual Amount (A)	AP Accrual Account (B)	Accrual Clear Amount (C) = (A-B)	Under-Invoiced Quantity	Over-Invoiced Quantity	Percentage Under-Invoiced	Percentage Over-Invoiced	*Percentage PO Accrual Amount (C)/Ordered QuantityPO Price**
Distribution 1	58*100 USD = 5800 USD	55*100 USD = 5500 USD	300 USD	60 - 55 = 5	Not Applicable	5/58*100 = 8.62%	Not Applicable	300 USD/60*100 = 5%

The following table describes the Rule 2:

Attribute	Operator	Value	Conditions
PO Status	=	OPEN	And
Accrual Clear Amount	Less Than	Absolute (1000) USD	Or
Percentage Under-Invoiced	Less Than	10%	Or
Percentage Over-Invoiced	Less Than	10%	Not Applicable

Results: The PO Status, Percentage Under-Invoiced, and Accrual Clear Amount Absolute values meet the criteria of Rule 2; therefore the accrual balances of 300 USD and (500) USD are automatically cleared.

The following table describes the Accrual Amounts Cleared Based on Rule 2:

PO Distribution	CMR Accrual Amount (A)	AP Accrual Account (B)	Accrual Clear Amount (C) = (A-B)	Under-Invoiced Quantity	Over-Invoiced Quantity	Percentage Under-Invoiced	Percentage Over-Invoiced	*Percentage PO Accrual Amount (C)/Ordered QuantityPO Price**
Distribution 1	58*100 USD = 5800 USD	55*100 USD = 5500 USD	300 USD	60 - 55 = 5	Not Applicable	5/58*100 = 8.62%	Not Applicable	300 USD/60*100 = 5%
Distribution 2	40*100 USD = 4000 USD	45*100 USD = 4500 USD	(500) USD	Not Applicable	45-40 = 5	Not Applicable	5/40*100 = 12.50 %	500 USD/40*100 = 12.50 %